Economic potential of small-scale citronella (Cymbopogon winterianus) production in the Philippines.

The economic potential of establishing smallholder citronella grass (Cymbopogon winterianus) plantation for essential oil production was assessed. Data were gathered through key informant interviews, field visits and observations of citronella plantation and processing activities of the University of the Philippines Laguna-Quezon Land Grant (UP-LQLG). The various activities involved in essential oil production include: site preparation (e.g. brushing and clearing, cultivation of soil, holing, planting, and fertilizing); maintenance and protection; harvesting and hauling; and, processing of citronella grass. By estimate, 96 L ha(-1) was produced per harvest which has a gross revenue of PhP115,200.00. With three harvests during the first year, the gross revenue was PhP 345,600.00. Considering all costs, the total net revenue of oil production during the first year of harvest was PhP135,562.20. Results also showed that pursuing such enterprise could be economically viable since its Net Present Value (NPV) in 10 years can reach as much as PhP2.891 M at 12% discount rate. This can be translated to PhP240.917 NPV ha(-1). The projected internal rate of return for the same period is around 91%, a fairly attractive return on investment The overall employment generation potential of the venture is also fairly attractive with an average of 936 MD ha(-1) yr(-1). One problem encountered that hindered the profitability of citronella production is that the UP-LQLG was not able to acquire an efficient extractor with which efficiency of oil extraction depends.